Celtic boss settles dispute with bank over €3m loan
Published 26/01/2011 | 05:00
RELIEVED Celtic boss Neil Lennon last night flew back to Scotland with his fiancee after settling a legal action with Bank of Ireland over a guarantee given for a €3m loan.
Mr Lennon had taken time off from preparing his side for tonight's Scottish Premier League match with Hearts to be in Dublin.
He arrived at the High Court with fiancee Irene McCloy where a judge was told the action taken by Bank of Ireland had been settled for an undisclosed amount.
Bank of Ireland had admitted it lost the actual guarantee papers but insisted it could produce evidence that Mr Lennon signed them at Dublin Airport in February 2006.
The bank sought summary judgment against Mr Lennon over the alleged loan guarantee last year when the Commercial Court was told the football boss had a credible defence and had not executed the guarantee.
The court ruled the matter should go to full hearing and it was adjourned to yesterday to be heard by Ms Justice Mary Finlay Geoghegan.
Following talks, the judge was told the matter had been settled and could be adjourned until March for the making of any necessary consequential orders. The terms of the settlement were confidential.
The bank claimed Mr Lennon, with an address at Queen's Gardens, Glasgow, was a director of Rocket Developments Ltd, The Crescent, Dundalk, Co Louth.
The bank claimed it loaned Rocket €3m in early 2006 to part-fund the proposed purchase of seven acres of zoned residential land at Knockbridge, Dundalk.
The loan principal and interest were to be cleared in full within a 12-month period from the sale of serviced sites on those lands.
The bank claimed Mr Lennon signed a personal letter of guarantee for the loan for €3,070,000 at Dublin Airport on February 24, 2006, in the presence of two bank officials. Three days later, the bank claimed, Mr Lennon brought the signed personal guarantee to the BoI branch in Dundalk, where it was placed on an official's desk.
It was discovered in mid to late 2006 that the guarantee had been mislaid and extensive searches failed to locate it. Mr Lennon had refused to re-sign a copy of the guarantee, the bank also claimed.
It alleged it was entitled to rely on the terms of its standard personal guarantee and on evidence from the officials allegedly present when the guarantee was allegedly signed. Rocket defaulted on its loan obligations and Mr Lennon was liable for €3.07m under his alleged guarantee, it was claimed.
In a sworn statement to the court last year, Colm McHugh, a senior business manager at BoI's Dundalk branch, said Mr Lennon told him he anticipated planning permission would be obtained by Rocket for about 60 houses on a site Rocket intended to develop in Co Louth; 50pc of the site would be sold to clear the bank debt and the rest of the site would be developed or sold at an expected profit of some €3m.